Texas two-step bankruptcy

Definition of "Texas two-step bankruptcy"
  1. A legal strategy involving Texas corporate law where a company splits into two entities so that one entity can declare bankruptcy to manage liabilities such as lawsuits while the other can be used to protect the company’s assets
How to use "Texas two-step bankruptcy" in a sentence
  1. The company used a Texas two-step bankruptcy to shield its profitable division from the lawsuits its shell company faced.
  2. Critics argue that the Texas two-step bankruptcy maneuver is being used to evade financial responsibility.
  3. Some businesses explore Texas two-step bankruptcy to minimize the impact of large legal claims on their operations.

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